But as I've stated in my previous post. I took profits just before the close as we rose above 6900 on the DOW. I sold off my SPY longs. And took half my shorts on the SKF. There is still a very high chance we will continue to rise tomorrow, but I will play cautious for now and take some profits.
If the markets rise again strong tomorrow morning, I plan to cover all my SKF shorts and sell a third of my FXI. This because I anticipate the DOW hitting resistance at 7000 and sell off. I will then rebuild my longs.
One very interesting piece of information I just heard on Bloomberg is that there is some strong talk about reinstating the uptick rule on shorts before the end of the month. This means one can no longer short a stock unless there has been an uptick. This will prevent the relentless pounding on stocks that has been so apparent with the bank stocks. This piece of information is crucial as it will carry the bank stocks up very rapidly. There will be a massive short covering should that happen.
I am looking to rebuild my SKF short near the $200 level. Hopefully if it gets there. I may also build a small TBT position as I believe money will flow out of treasuries to add to equity positions.
Games plan:
- Take profits on longs if we have a strong open within the first 30 minutes tomorrow
- DOW @ 6780 is where I will rebuild long positions.
- If we don't get a strong open, I will just build small long positions slowly as the markets retreat to each support level
Best of luck to all.
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